Diabetes is a global epidemic with 246 million people affected, and the prevalence is expected to double by 2030. The disease represents a significant public health problem. Diabetes within the Veterans Health Administration (VHA) poses a significant challenge because the estimated prevalence of diabetes among its enrolled patients is as high as 20%, substantially higher than the general population. Diabetes is the third most common VHA diagnosis and accounted for 25% of pharmacy costs and over 1.7 million hospital bed days. Diabetic retinopathy is the leading cause of vision loss in middle-aged adults. Despite the use of therapeutics targeting the vascular endothelial growth factor (VEGF), the majority of patients do not recover vision, and the effect is transient, needing repeated intravitreal injections of drugs. Our long-term goal is o fully characterize a novel pathway, sphingosine 1 phosphate (S1P) in diabetic retinopathy, and identify novel targets for the treatment of this blinding condition, macular edema. Pericyte loss is the classic histologic finding of early diabetic retinopathy in the human retina. It is possibl that earlier pericyte dysfunction occurs even before pericyte loss. It is not known how this pericyte change in diabetes further leads to increased vaso-permeability in retinal vessels. In new and exciting findings, we have shown that pericytes can regulate the expression of N- cadherin in endothelial cells that is necessary for proper endothelial-pericyte interactions, and that perictyes produce sphingosine 1 phosphate (S1P), among other molecules, that appears to play a role in the regulation of endothelial barrier function. The central hypothesis of this proposal is that pericyte- derived sphingosine 1-phosphate (S1P) maintains the normal Blood-Retinal Barrier and disruption of the S1P pathway in early diabetic retinopathy leads to the alteration of cell-cell interactions and changes in vascular permeability. The rationale for the proposed research is that understanding the mechanism of the S1P pathway in diabetes will help us in identifying novel targets that can prevent or reverse the damage to the blood-retinal barrier in macular edema, that afflict 14- 25% of all patients with diabetes. Based on our preliminary data, we will test the hypothesis with the following specific aims: i) to identify the mechanisms by which pericytes contribute to the maintenance of the blood-retinal barrier ii) to determine the extent to which diabetes modifies endothelial-pericyte interactions and components of the S1P pathway leading to breakdown of the blood-retinal-barrier and iii) to evaluate the effectiveness of compounds that target the components of the S1P pathway to prevent or reverse increased retinal vascular permeability in the diabetic animal. The proposed research is significant because the study will help us to better understanding how pericytes normally contribute to the stabilization of cell-cell junctions and the blood-retinal barrier, and how this process may be disrupted during the development of diabetic retinopathy. Our approach is innovative because this proposal introduces an innovative strategy that targets the mechanisms of stabilizing the initial step of pericyte dysfunction in diabetes, a critical upstrea event for the development of diabetic macular edema. ))